Fluvial erosion of cohesive soil is mediated by interactions between soil physical, biological, and chemical characteristics such as soil aggregate stability and extracellular polymeric substances (EPS). While labile organic matter (OM) stimulates microbial EPS production and significantly improves soil aggregate stability in agricultural soils, these interactions remain unexplored in streambank soils. The study goal was to quantify the impact of OM on aggregate stability, EPS, and fluvial erosion rates of cohesive streambank soil. Increasing amounts of 1‐mm sieved dry grass were incorporated at rates of 0, 1, and 4 g per 100 g of 2‐mm sieved silt‐loam soil (treatments T0, T1, and T4, respectively). Samples (eight replicates per treatment) were matured in a greenhouse for 50 days prior to flume erosion testing. EPS carbohydrates were significantly (p < 0.05) lower in T1 (324 ± 63 μg/g) compared to T0 (388 ± 37 μg/g) and T4 (376 ± 44 μg/g). EPS proteins were significantly higher in T1 (194 ± 15 μg/g) and T4 (223 ± 61 μg/g) compared to T0 (101 ± 20 μg/g) and positively correlated with mean weight diameter (MWD), a measure of soil stability against slaking. MWD was 16% and over 100% higher for T1 and T4, respectively, than for T0. Similarly, the average soil erodibility coefficient of T1 and T4 was 25% and 61% lower than the erodibility of T0; however, only the reduction for T4 was significant. The data presented here underscore the important role labile OM plays in improving soil physical stability and increasing the resistance of cohesive soil to fluvial erosion of streambanks.